Online Regulations - Your Website and the Law

The internet is not a lawless territory where anything goes. An online business is subject to the same regulations as any other model, and there are pitfalls particular to this relatively new and constantly changing environment. Michael Sutton sets out regulation guidelines for developing and operating an online site so it won’t fall foul of the law

These days, every business seems to be online. From multinational corporations to one-man businesses, the low cost and relative ease of advertising online has lured many traders to create a website to promote their goods and services. Consumers are also attracted to the wealth of purchasing information that these traders are making available on the internet.

However, laws and rules apply to trading online, and you need to check before you begin that your site will comply with them. Dealing with problems after you’ve opened the site can be expensive and time-consuming, as well as damaging to your business.

The first issue to consider is the domain name. This is an address for a location on the internet and is used by a business as an easy way to find its website. An Australian business will most likely wish to register a domain name ending in ‘.com.au’. These may be registered through an accredited registrar. (You can find a list of these at www.auda.org.au/registrars )

The two main concerns when picking a domain name in Australia should be whether it meets the eligibility criteria, and whether it infringes the rights of third party.

To register a ‘.com.au’ domain name, there are certain eligibility and allocation rules (visit www.auda.org.au/pdf/auda-2005-01.pdf for a copy). Basically you need to be either an Australian registered company, be trading under a registered business name or have an Australian trade mark. The domain name must either exactly match or be an acronym of your company, business name or trade mark, or be closely and substantially connected to you because of the product or service you provide.

Assuming you meet the eligibility criteria, you need to check the chosen name does not infringe the rights of a third party. Just because you have a trade mark, company name or business name, does not necessarily mean you have the right to use the name as a domain name. Searches should be undertaken to discover whether it may infringe the company name, business name, trade mark or product or service offered by a third party.

The company and business name registers, IP Australia databases, the Yellow and White Pages and Google are all useful tools. You may also wish to consider what use is currently being made of the name overseas if you think there is the potential to operate your business internationally. While it’s impossible to guarantee a name can be used without recourse, from a risk management perspective thorough searches from the outset will improve your ability to grow the business without the need for future name changes.

Take the fashion brand Tsubi, for example. When the owners started the brand as a hobby, they may not have imagined its international success. Unfortunately, US footwear manufacturer Tsubo was not happy, and Tsubi is soon to be marketed as Ksubi outside of Australia. While a brand like Tsubi that thrives on notoriety is unlikely to be damaged by the name change, there will certainly be a financial cost in implementing the dual branding. More conservative businesses or brand owners may not be able to pull off a name change with such aplomb.

It’s unlikely that business owners are also talented website designers, so utilising one of the readily available, teach-yourself web design packages may be a thrifty option, and useful for a smaller business that simply wants to disseminate simple information about itself. If, however, a business wishes to fully utilise the power of the internet and make it a central focus for the business, it will most likely need to instruct a website designer to produce the type of slick, user-friendly websites that successfully promote a business.

Once a designer has been chosen and a price agreed upon, the two main considerations for a business owner include the ownership of the material and information that make up the website, and the need to take steps to ensure such material and information do not infringe the rights of third parties. These issues should be dealt with in a contract with the designer.

It is worth remembering the general rule that if you instruct a designer to create a website for you, the designer will own the intellectual property rights in the content of that website, including the text, images and layout. Copyright is a right that arises automatically, upon creation. The ‘author’ is the owner of the copyright at first instance. As with every rule there are exceptions, but you should ensure there is a clause in the design agreement that assigns ownership of all intellectual property rights in the content and design (including any future amendments) to you. Upon execution of the agreement you will own such intellectual property rights and may notify the world of your copyright ownership by adding “© 2006 [Name of your company/business]” at the bottom of each web page.